Apple’s supply chain issues are “a whirlpool of investor distractions” and “blown out of proportions”: Analysts


According to Apple analyst, loop fund co-founder and managing partner Jean Münster, Apple’s supply chain problems have been “disproportionately blown away.”

Münster Note On April 29, after the company predicted a decline in performance in the third quarter of 2022, which ends in June, the tech giant’s supply chain problem was actually an “investor distraction”. Did.

The company made forecasts based on persistent global supply chain disruptions.

“We believe that year-over-year earnings performance for the June quarter will be affected by a number of factors. Supply constraints caused by COVID-related turmoil and industry-wide silicon shortages are customer demand for our products. We are influencing our ability to meet, “Luca Maestri, Chief Financial Officer of Apple Inc., said on April 28. Revenue call Details of the company’s second quarter results.

The company expects supply constraints to impact sales of $ 4 to $ 8 billion, significantly more than it experienced in the March quarter.

Apple CEO Tim Cook said that most of the supply constraints are concentrated in the corridor of Shanghai, China’s financial hub, which was hit by a strict blockade of COVID-19, which is the company’s most product category. Said that this is the case.

“The COVID-related turmoil is also affecting customer demand in China,” Maestri said.

However, Münster said he believes the topic was “disproportionately blown away” despite the phone makers experiencing a shortage of components procured in China.

“Supply chain conversations are important because they obscure the essential pace of growth and make it difficult to identify the health of the business,” Münster wrote. “”I think this topic has been disproportionately blown away and is now a distraction for investors, as evidenced by the number of times Apple has referred to the “supply chain” in its revenue call. “

Analysts have pointed out the impact of supply chain issues on the profits of tech giants since the June 2021 quarter, noting that “supply chain headwinds are having a pendulum impact.”

Münster said supply chain problems often improve, but only worsen in the next quarter.

“In the past year, supply chain revenue has been around $ 27 billion, about 6% behind total sales,” he writes.

Münster believes that Apple “manufactures the best consumer technology products in the world,” and its customers are willing to get or wait for an upgrade rather than looking for a competing product. ..

That’s why, despite global economic uncertainty, Apple’s growth revenues for the second quarter ending March 26 were $ 97.3 billion, up 9% from the same period in 2021. Says Münster. This number was higher than Wall Street’s expectation of 4%.

Apple’s second-quarter global phone sales were $ 50.6 billion, a record for the period, with iPad sales down 2% but up 5% year-over-year.

The company’s revenue from wearables, household items and accessories also increased by 12% to a March quarter record of $ 8.8 billion.

“As long as Apple continues its mission to create the world’s best consumer high-tech products, the supply chain topic won’t go away anytime soon,” Münster said.

Catabella Roberts


Katabella Roberts is a reporter currently based in Turkey. She focuses primarily on the United States and covers the news and business of The Epoch Times.